TY  - JOUR
AU  - Backus,David
AU  - Henriksen,Espen
AU  - Lambert,Frederic
AU  - Telmer,Christopher
TI  - Current Account Fact and Fiction
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15525
PY  - 2009
Y2  - November 2009
UR  - http://www.nber.org/papers/w15525
L1  - http://www.nber.org/papers/w15525.pdf
N1  - Author contact info:
David Backus
Stern School of Business
NYU
44 West 4th Street
New York, NY 10012-1126
Tel: 212/998-0873
Fax: 212/995-4221
E-Mail: dbackus@stern.nyu.edu

Espen Henriksen
University of California, Santa Barbara
2127 North Hall
Santa Barbara, CA 93106
E-Mail: espen@econ.ucsb.edu

Frederic Lambert
Banque de France
International Macroeconomics Division
46-1374 SEMSI
75049 Paris Cedex 01
France
E-Mail: frederic.LAMBERT@banque-france.fr

Christopher Telmer
Tepper School of Business
Frew and Tech Streets
Carnegie-Mellon University
Pittsburgh, PA 15213
E-Mail: chris.telmer@cmu.edu
AB  - With US trade and current account deficits approaching 6% of GDP,  some have argued that the country is "on the comfortable path to ruin"  and that the required "adjustment'' may be painful.  We suggest instead that things are fine:   although national saving is low, the ratios of household and consolidated net worth to GDP remain high.  In our view, the most striking features of the world at present are the low rates of investment and growth in some of the richest countries, whose surpluses account for about half of the US deficit.  The result is that financial capital is flowing out of countries with low investment and growth and into the US and other fast-growing countries.  Oil exporters account for much of the rest.
ER  -